To say UK imports of US hardwoods rebounded strongly in 2021 is an understatement. They didn’t just recover ground lost in 2020, they hit their highest level in three decades, firmly consolidating the UK’s status as American suppliers’ biggest European market. Their exports to the next biggest, Germany, also grew, but were just 40% by volume of their UK total.

UK importers say the hardwood market outlook is now becoming more uncertain and they are consequently becoming more wary in purchasing. This is primarily down to the geopolitical situation and the threat that inflationary pressures, exacerbated by the war in Ukraine, will slow the economy.

For the time being, however, they say hardwood demand is holding up, including for American, with what one importer said was a “perfect storm of factors” causing a “near crisis in European oak supply”, reported to be prompting increasing numbers of specifiers and end-users to consider US hardwood instead.

In fact, according to the American Hardwood Export Council (AHEC), the first two months of 2022 saw a further 48% rise in UK imports from the US.

Through 2021 and the first quarter of 2022, UK hardwood importers and distributors variously rated business as “good” to “exceptional”. Demand was strong from construction and joinery, to furniture making. While it is reported to have faded as 2021 progressed, the overall market was boosted particularly by the home improvement boom, triggered by lockdown and increased home working. Business is also reported to have picked up, albeit from a low base, in retail and hospitality sectors.

Total UK hardwood imports from the US in 2021 hit 152,258m3, worth US$99m, against 90,800m3 and US$65m in 2020 and 108,300m3 and US$83.9m in 2019.

Strongest growth came in US white oak, with imports up 81% to 80,600m3, followed by tulipwood, up 75% to 42,600m3. Walnut and ash also moved ahead, up 54% and 30% respectively to 10,536 m3 and 7,950m3.

To Europe as a whole, US red oak exports surged 63% to 42,900m3 in 2021, the highest level since 1998. In the UK, demand rose 11% to 6,072m3.

One importer-distributor felt red oak was “still not capturing UK imaginations”.

“We’re selling some 8ft length 4qtr for coffin mouldings and some 6qtr, 10 and wider long stock for stair strings,” said another importer. “But while customers might take 10 boxes of white oak a quarter, they’d take half a box of red. Moreover, we’re currently finding it difficult to source due to demand elsewhere.”

Others, however, say they’re now seeing an increase in interest, notably due to red oak in some instances remaining less than half the price of white. “We’re finding joiners considering it more, and moulding manufacturers too,” said an importer-distributor.

Another said they were actively promoting the species: “We have over 150m3 of red oak in stock and are trying to trade as a market leader with this commitment encouraging wider discussion.”

These comments were borne out by AHEC’s figures, which show a further 38% rise in UK red oak imports in the first two months of 2022.

According to AHEC’s February market report, the overall 2021 increase in UK imports from the US was “more or less matched” by that in higher value sawn hardwood imports from Europe”, which reached 165,000m3. The market loser was tropical sawn hardwood.

“[UK tropical] imports in 2021 were only 68,000m3, up on 62,000m3 in 2020, but still down on typical pre-pandemic annual levels of 80,000m3 to 90,000m3,” said the AHEC report. “With supplies from the Far East and South America increasingly difficult due to [container rates and availability] more demanding environmental assurance requirements and lack of domestic kilning, the UK has become increasingly dependent on supplies from just one country, Cameroon, which accounted for 60% of UK 2021 tropical sawnwood imports.”

A preoccupation now of UK hardwood businesses is, naturally, Russia’s invasion of Ukraine. While they are not significant customers of Ukrainian, Russian or Belarusian suppliers, counterparts and especially furniture makers elsewhere in Europe, notably Poland and Lithuania, are more dependent. EU oak lumber and log imports from the three countries have fallen in recent years, but the EU+UK total in 2021 was still 123,000m3, with Ukraine the largest supplier. So the EU putting a blanket ban on timber imports from Russia and Belarus and Ukrainian supply disruption are reported to be exacerbating supply stress and price pressure on western European hardwoods, notably oak.

“There are other factors involved too in the European oak situation, besides war in Ukraine; the growing global appetite for wood fibre generally and particularly more demand from China,” said an importer. “The Croatian authorities have also revised their log auction and allocation system, further disrupting supply. It is the perfect storm.”

European oak prices in January 2022 were consequently reported up 50% on April 2021, with an importer reporting a further 10-15% rise since.

“It’s now 20-25% more expensive than American white and it’s increasingly difficult to source,” they said. “We’ve got ongoing European oak contracts, but when you ask regular suppliers for 100% of normal volumes, you’re offered 70-80%. You can’t get extra. It’s as difficult to source now as American white oak was a year ago.”

The European oak situation is expected to deteriorate and at the same time more American white oak is becoming available due, it’s reported, to mills’ increased lumber inventories.

“We’re not being inundated with offers, but we are getting more approaches, with some mills clearly keen to move timber on,” said an importer. “Six months ago from an enquiry to 10 suppliers, we’d get maybe three answers. Now we’re getting eight or nine.”

For end users, changing from European oak to American white oak is not without its challenges of course.

“With European oak you’re getting narrower, shorter stock that’s sap and defect free, while American is clear cutting graded and sap isn’t classed a defect,” said an importer. “While European is one species, American white is a group, so you can also get more colour and density variation. However, with some due diligence on the product and understanding of yield and cost factors, these issues aren’t insurmountable. You wouldn’t need to retool and reconfigure your factory to make the change.”

One furniture designer and manufacturer, Benchmark, has actually made the switch from European oak to American red. It put it through thorough evaluation and concluded that in most areas it was a technical match and, in some, performed better than its European rival.

Some feel Brexit, if not playing in American hardwoods’ favour, has also put it on a more level competitive playing field with European, with the latter also now having to undergo due diligence under the UK Timber Regulation (UKTR).

The AHEC report points out that, while for American hardwoods there is transparent, readily accessible data on forest resources and regulations, providing assurance of legal and sustainable supply, “with well tested logistics and import procedures”, the situation is less clear for European hardwoods. The latter may be more readily available certified, but, certification procedures for hardwoods often rely on volume credits so don’t necessarily provide clear information on forest source. Consequently, meeting UKTR due diligence requirements can potentially be more of a challenge.

While there may be signs of more availability in some American species, however, one thing importers are not seeing is prices softening. They’re still firm across the board. That means tulipwood remains double the price it was pre-pandemic, white oak is up 65-100% depending on thickness, and walnut is up 30%.

“You may get some offers down 1% or 2%, but that’s offset by higher trucking and shipping costs and recent weakening of sterling against the dollar,” said an importer. “And overall prices are underpinned by continuing strong US domestic demand and rising consumption elsewhere.”

Prices for US ash, meanwhile, are firming – up 10-15% in March – due to increasing scarcity.

“We’ve been told ash supply was about to run out for 10 years due to emerald ash borer infestation and supply continued. Perhaps now we’re seeing it happen,” said an importer.

Some believe deterioration in European hardwood supply and the potential of that to prompt more turning to American could now put pressure on US timber prices and availability. There’s also a view tightening African supply may compound this. There’s concern too that the spectre of further rising inflation, the result particularly of surging fuel costs driven by trade sanctions against Russia, could increasingly dent UK business and consumer confidence. So, there’s more caution in the air.

“We had a good quarter and demand remains robust, but we’re increasingly just buying what we need,” said an importer. “It’s not a time to speculate. If you get it right, you could be quids in, but you could also get it significantly wrong.”

The consensus therefore is that US hardwoods’ outlook in the UK is mixed. There are now more stocks on the ground and the economy is generally expected to slow. At the same time, potential is seen for US species to benefit further from increasing constraints on supply of competing timber. One importer also highlighted that, while labour shortage is an issue for mills – and resulting in a lack of timber haulage drivers, contributing to long US lead times – “America does have the potential to increase production”.